Zambian Breweries’ Plc profits increase six-fold as volumes surge

ZAMBIA – Zambian Breweries Plc has posted record breaking profits after tax of US$121.36 million during its 2018 financial year from just US$18.41 million in 2017 driven by increased beer volumes.

In a statement announcing its audited
financial results for the year ended December 31, 2018 said that the remarkable
performance was mainly attributed to increase in beer volumes, which grew by
23% during the period under review.

“Results for the year 2018 were
remarkable, especially on the clear beer side, with volumes growing at a record
of 23%.

Our total volumes grew by 13%, partially
eroded by a decline of 8% in the soft drinks category, leading to a total
growth of 11%,” the company stated.

The company said that the performance was
also supported by the successful execution of its growth strategy which majorly
entailed expanding distributions through a ‘go deep and go rural’ plan.

The Mosi and Castle
Lager also linked the performance to affordability in addition to
strategic market segment focus especially in the middle-class segment both in
its locally produced and imported premium beer brands.

The mainstream 750ml pack recorded
impressive 166% growth, while the affordable 750ml pack recorded 77% growth,”
the brewer explained.

The company further stated that the
launch of popular brands, such as the globally-renowned Budweiser and Stella
Artois had also gained traction.

“The premium segment is back to growth
with an 8 per cent improvement against prior year, thanks to the recovery of
Castle Lite and the introduction of Stella Artois and Budweiser.

Strong gains were recorded by Stella
Artois in the high-end segment, and there were encouraging results from
Budweiser,” it stated.

“We are braced for a demanding year in
2019, amid economic uncertainty, increased regulation and a continued threat
from smuggling and illicit alcohol,” the company added.

In October, 2016, AB InBev, the
Belgium-based brewer, took over ownership of SABMiller in a US $100 million
deal, which assumed new ownership of Zambian and National Breweries.

Ab InBev, which manufacturers the
globally-renowned Stella Artois and Budweiser beer brands, among others, closed
a more than US $100 million acquisition of its fiercest rival and world’s
second brewer, SABMiller.

This meant AB InBev has since 2016 been
in the process of drastically increasing its market share in regions around the
world, particularly Africa, where SABMiller had a visible presence through its
country-level subsidiaries.